Dept o' Labor says US created more jobs than it thought this spring The US economy has been humming along a little more strongly than the Department of Labor originally thought over the past few months – US companies added a lot more workers than expected in February and March, and did better than expected in the shiny new report for April, too. The first Friday of every month is when the …
Somehow, I cannot believe the unemployment report statistics because there is too much at stake for the Obama administration and that all of the people involved in the statistics are emplyed by the government.
It is so interesting that these numbers keep getting better but the economy hasn't.
Here is why the numbers get better when the economy doesn't. Its cause once you no longer qualify for unemployment benefits you no longer count on it. Also remember employment means a person working for minimum wage flipping burgers barely making ends meet in the US, which is pretty much what people who's unemployment benefits are forced to do.
Not only are well paying manufacturing jobs being replaced by low paying "service" jobs, many workers are being paid less year-over-year. Several of my friends have told me that they haven't received a raise for a few years which is a cut in real income due to inflation. They are also having to pay a larger portion of their health benefits. These friends are working for school districts and civil service postings where pay and benefits for long time (greater than 5 years) employment are usually above that of the private sector.
The added insult to dismal earning prospects is that companies are still requiring numerous certifications and extensive continuing training to get the jobs. Throw in the BYOD craze and wardrobe expectations and it might be just as profitable to work at Wal-Mart.
Yes. Under the Clinton administration, "long term discouraged workers" were removed from all statistics. The BLS uses U-3 as official unemployment rate, which includes only people officially looking for work within the last 4 weeks. U4 adds some longer term unemployed, U-5 some more, and U-6 "undermployed" (people with a little work but not enough to possibly cover bills.) If a person has not looked for work within the last 4 weeks (as far as the state is concerned) they are not unemployed, and if someone so much as painted a fence for an hour they also are not. U-6 bumps things up to about 15%, and ShadowStats places current unemployment at around 22%. (This estimate tries to apply pre-1994 methodologies.) The peak unemployement during the great depression was estimated at 22%.
Much as I despise Clinton and love Reagan, I think they were removed under Reagan. They kept beating him up about the unemployment numbers even though jobs were growing as was the GDP. He correctly argued that people who aren't looking for work in a full employment economy shouldn't count as unemployed. Unfortunately the unintended consequences of that decision include that discouraged workers in a contracting economy also make the number look better than it is.
There is some frothing in the housing market...
It appears that the Fed’s zero-interest-rate and QE policies have finally achieved its insane goal of re-igniting a housing bubble.
The Case-Schiller 20-City Index shows that housing prices increased by 1.2 percent in February and 9.3 percent year-over-year. All cities included in the index experienced substantial gains, which have been driven by staggeringly large increases in the bottom tier of the market. In Phoenix housing prices rose by 23 percent over the past year, but by 39 percent in the bottom third of the housing market. Las Vegas home prices were up by 17.6 percent in the past year while prices for houses in the bottom tier rose by 34.2 percent, and at an annual rate of 56.2 percent in the last three months. In Atlanta, bottom-tier home prices rose 36 percent year-over-year and at an annual rate of 70 percent in the past three months.
In light of the current data, Dean Baker, one of the few left-of-center economists to issue an early warning about the last housing bubble, sees signs of a renewed housing bubble on the horizon:
"This rapid increase in house prices should be prompting serious concern among regulators. At the moment, it is not driving the economy in the same way as the housing bubble did in the last decade. Construction is still at very low levels, so a plunge in prices could not have impact on the economy through this channel. While saving rates are again low, possibly due in part to increasing home equity, it is likely that the data are somewhat distorted by the large dividend payouts of the fourth quarter. If the saving rate remains below 3.0 percent into the second half of the year (the post-World War II average is more than 8.0 percent) then this would suggest that inflated house prices are playing a role. If that is the case, a decline in house prices would lead to another hit to consumption.
However the main reason that the rapid run-up in prices in the bottom tier should be a cause for a concern is that moderate-income homebuyers may again take a big hit if these prices plunge in a correction."
@Destroy All Monsters: Do you believe all of that, or just half?
The suggestion that construction is low, is to me, insane! Maybe this means construction within newly acquired, previously desolated land? As far as I can see, constructions is booming in older sectors with rehabilitation of "poverty" zones and other lower income areas. In many places, it has gone from cutting down trees, to cutting down families.
As far as the increase in housing prices, I completely agree. I'm currently in a position where I have to find a new house, and after tracking the prices for the last 12 months, I've seen as high as a 15% increase across a dozen or so houses.
> Or, more precisely, China's deep pockets.
I expect better from El Reg. China doesn't "loan" money to the US federal government (the institution with the power to print $1 trillion out of thin air to bail out the banks without talking to the Chinese).
China sells things to the US for US dollars, and now they have two choices:
1) Buy other things sold in US dollars (not necessarily from the US)
2) Sit on the newly acquired dollars
The first is out of the question to a large part because China has set themselves up to be an export driven economy (for at least the next couple of years or so). So they're stuck continuously stockpiling US dollars over time.
They can leave them in a vault earning no interest, or they can buy US treasuries that earn interest. As any sane person would do they go the interest-earning route. If China were to stop "loaning" the US money, would the US government stop being able to deficit spend? No. They just ask the Fed to buy up the treasuries instead.
...they'll revise the data downwards but it will never be reported by mainstream media. They do this month after month after month to try and dupe the naive and gullible.
Ask those who have been unemployed for 1-2-3 years if the employment situation has improved. The Feds actually stop counting the unemployed once their benefits expire which is typically 12-18 months. After that you don't exists as far as the Feds are concerned so naturally unemployment figures drop unless even more people become unemployed at the rate of those falling off the unemployment rolls. For those lucky enough to find a job, ask them how much their salary decreased and if the new job is in the field they are trained in. The employment situation in the U.S., Europe and Asia is terrible and not improving much at all.
Those numbers shouldn't surprise anybody with a brain. Of course they are going up.
Those are mostly minimum (or below minimum) wage jobs for new workers getting their first crack at real life. You know, the ones who have employers who have been telling the President for months now that they can't afford his healthcare abomination. And since they've been roundly ignored, they are doing what they have to in order to stay in business: cutting their part time employee hours to no more than 28 a week with 2 hours of possible OT. That means they need even more part time workers to cover what use to be longer shifts.
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